Are you a homeowner in Calgary, Alberta, looking to leverage the equity in your home for various financial needs? Home Equity Loans can be a powerful financial tool, and as a mortgage broker at Concourse Mortgage Group, we’re here to guide you through the process and help you make the most of your home’s equity. In this comprehensive guide, we’ll explore what home equity loans are, how they work, and how you can benefit from them.

What Are Home Equity Loans?

Home Equity Loans, often known as a Home Equity Line of Credit (HELOC), are a financial product that allows you to borrow money against the equity in your home. Equity represents the portion of your home’s value that you own, which is the difference between your home’s market value and the remaining balance on your mortgage. With a home equity loan, you can use your home as collateral to secure a line of credit.

How Does a Home Equity Line of Credit Work?

A Home Equity Line of Credit works somewhat like a credit card but with your home as collateral. In a sense, equity in your home could be viewed as your largest tax-free savings account.  Here’s how it typically operates:

1. Application: You apply for a HELOC through a mortgage broker or a financial institution. They will evaluate your credit score, your income, and the amount of equity in your home.

2. Credit Limit: Once approved, you’re granted a credit limit based on a percentage of your home’s equity. This credit limit can vary depending on the lender and your financial situation. Refinancing limits in Canada are 80% LTV (loan to value), or in simpler terms, you cannot refinance above 80% the value of your home, which would be determined by an appraisal typically. The maximum LTV for a HELOC would be 65% LTV, meaning the remaining 15% if going to 80% LTV would need to be in a term mortgage – fixed or variable for example. We know, that’s a lot of numbers, but let us guide you through it.

3. Accessing Funds: You can access funds from your HELOC as needed. This can be done through checks, a credit card, or online banking, making it convenient for various expenses.

4. Interest Rates: Interest rates for a HELOC are typically variable, meaning they can fluctuate with market conditions, or more specifically – prime rate. You’ll pay interest only on the amount you’ve borrowed.

5. Repayment: You’ll be required to make regular payments on the interest and sometimes the principal. The repayment terms vary depending on your lender.

Benefits of Home Equity Loans

1. Flexibility for Various Needs

A Home Equity Line of Credit offers flexibility to use the funds for various purposes. Whether you’re planning home improvements, consolidating debt, covering educational expenses, or dealing with unexpected financial emergencies, a HELOC can provide you with the financial freedom to meet your needs. A HELOC has no “speed limits”, meaning you can pay it off as quick as you’d like, or as slow as you’d like, with the ability to pay interest only should you choose.

2. Lower Interest Rates

HELOCs often come with lower interest rates compared to other forms of unsecured credit like credit cards or personal loans. This can result in significant savings, especially if you’re consolidating higher-interest debts.

3. Potential Tax Benefits

In some cases, the interest paid on a Home Equity Line of Credit may be tax-deductible. It’s essential to consult with a tax professional to understand the specific tax implications based on your situation. Allow a Concourse Mortgage Broker to help identify “good debt” vs “bad debt”, and how to make your mortgage interest tax deductible in some cases.

Working with a Mortgage Broker for Your Home Equity Line of Credit

Navigating the world of home equity loans can be complex, and that’s where a mortgage broker can be invaluable. At Concourse Mortgage Group, our team of experienced mortgage agents can assist you in finding the best home equity loan solution tailored to your financial needs and goals. Here’s how we can help:

1. Access to Multiple Lenders: We have connections with multiple lenders, including big banks and credit unions, allowing us to shop around for the best terms and interest rates for your HELOC.

2. Expert Guidance: Our mortgage professionals will provide expert guidance throughout the application process, ensuring that you understand all aspects of your home equity line of credit.

3. Negotiation Skills: We are skilled negotiators and can help you secure favorable terms, such as competitive interest rates and flexible repayment options. We often have some lenders offering promotional rates on HELOCs and other mortgage products.

4. Simplified Process: We will simplify the application process, help you gather the necessary documents, and ensure that your HELOC application is submitted accurately and efficiently.

Understanding Your Home Equity Line of Credit

To maximize the benefits of your Home Equity Line of Credit, it’s essential to have a clear understanding of how it works. Here are some key aspects to consider:

Credit Limit:
Your credit limit is determined by the lender and is based on a percentage of your home’s equity. Make sure you know your credit limit and use it responsibly.

Variable Interest Rates:
Most HELOCs come with variable interest rates. These rates can change with market conditions, so it’s important to be prepared for potential rate fluctuations.

Repayment Terms:
Your lender will provide details about the repayment terms. This includes whether you need to make interest-only payments or pay down the principal as well.

Credit Cards vs. HELOCs:
While a HELOC operates similarly to a credit card, there are important differences. For example, HELOCs typically offer lower interest rates and may have tax advantages, but they are secured by your home.

Using Equity Wisely:
Using the equity in your home is a significant financial decision. Make sure you use your HELOC for purposes that make financial sense and contribute to your overall financial well-being.

Comparing Home Equity Loans and Mortgage Loans

It’s important to note that home equity loans and mortgage loans serve different purposes. A mortgage loan is used to purchase a home, while a home equity loan leverages the value of your existing home. If you’re considering either option, our mortgage professionals can help you assess which one aligns with your financial goals.

Monitoring Your Home Equity Line of Credit

As with any financial product, it’s crucial to monitor your Home Equity Line of Credit carefully. Keep track of your spending, make payments on time, and be mindful of your credit limit. Responsible use of your HELOC can provide you with ongoing financial flexibility and benefits.

Get Started with Your Home Equity Loan

Are you ready to explore the possibilities of a Home Equity Line of Credit? Contact Concourse Mortgage Group, your trusted mortgage broker in Calgary, Alberta, to get started. Our experienced mortgage professionals are here to work with you, evaluate your financial situation, and find the best home equity loan solution to meet your needs. Whether you’re a seasoned homeowner or new to the world of home equity loans, we’re committed to helping you unlock the potential of your home’s equity.


Walk-in – come see us at 138 Mahogany Plaza SE. We’re in office from 8:30-4:30 Monday-Friday, unless out meeting clients.